A Fourth Painkiller Is Linked to Increases in Heart Problems

December 21, 2004

By ALEX BERENSON

The future of Celebrex, the best-selling arthritis pain medicine, may be determined as much by Dr. Jason Faller and other physicians treating arthritis patients as federal regulators.

Even if regulators do not force Pfizer to withdraw the drug from the market because of heart attack risks, its prospects are dim if doctors stop prescribing it in the volume they have in recent years.

Dr. Faller, chief of the arthritis clinic at Roosevelt Hospital in New York, said that about 25 percent of the clinic's patients now took Celebrex. Over time, he predicted that number would probably fall to about 5 percent.

"Certainly I will be disinclined to start patients anew on the drugs," Dr. Faller said. Still, he said Celebrex and Bextra, a similar arthritis drug also made by Pfizer which has also raised heart attack concerns, provide a useful alternative for some patients who are not helped by older over-the-counter drugs like ibuprofen, the generic name for Advil.

Reflecting the medical community's concerns about Celebrex and Wall Street's increasingly negative view of the drug's prospects, shares of Pfizer fell nearly 6 percent yesterday after plunging 11 percent on Friday. Even so, some investors said that the sell-off appeared to have gone too far, particularly because the Food and Drug Administration has not said it would order the drug withdrawn.

On Friday, Pfizer said that a study had found that high doses of Celebrex taken for long periods were associated with a sharply increased risk of heart attacks. On Sunday, under pressure from the F.D.A., Pfizer said it would suspend all consumer advertising for Celebrex.

The company says it plans to continue selling the drug because it maintains that there is no evidence that Celebrex is unsafe at lower doses or for shorter periods.

In heavy trading on Monday, Pfizer shares fell $1.46, or 5.6 percent, to close at $24.29. Pfizer has lost almost $35 billion in market value since it disclosed the results of the study on Friday morning.

David Katz, the chief investment officer of Matrix Asset Advisors, which manages about $1.5 billion, said the decline reflected Wall Street's panic over potential product liability lawsuits rather than a careful calculation of the real impact of the Celebrex problems on Pfizer. Matrix owns 2.2 million Pfizer shares and plans to buy more, Mr. Katz said.

Even if the F.D.A. forces Pfizer to stop selling Celebrex and Bextra entirely, he said, Pfizer shares have fallen too far.

Many scientists and analysts said that the market for Celebrex would shrink quickly because it had shown little benefit over older and much cheaper pain medicines even before Friday's announcement. Without a clear benefit, they said, even a small heart risk will discourage doctors from prescribing it.

Combined sales of Celebrex and Bextra, a similar arthritis drug also made by Pfizer, are expected to be more than $4 billion in 2004, about 8 percent of Pfizer's worldwide sales. But sales will probably plunge next year, said Michael Krensavage, an analyst at Raymond James. "Unless a patient is at risk for a bleeding stomach, the drugs are just not worth the money," he said.

In a research note yesterday, Richard T. Evans, an analyst for Sanford C. Bernstein, predicted that total sales of Celebrex and Bextra would fall from $4.2 billion this year to $775 million in 2007. As a result, Pfizer's overall sales will drop, from $51.1 billion this year to $46.5 billion in 2007, Mr. Evans said.

Both Celebrex and Vioxx, a similar medicine which Merck stopped selling in September after it was linked to heart attacks, are generally no more effective than over-the-counter medicines, said Dr. Marcia Angell, the former editor of The New England Journal of Medicine.

"There was never much reason for these drugs in the first place," she said. "So one should accept virtually zero side effects from these drugs."

But Dr. Gail Cawkwell, who directs Pfizer's medical research on Celebrex and Bextra, said many patients benefited from the drugs. "Celebrex still has some significant benefits over the older medicines," she said. "We've had a lot of support from doctors saying they have patients who haven't responded to anything else."

In the meantime, analysts expect Pfizer to earn about $2.10 a share next year, which means the company is now trading at less than 12 times its projected profits. That multiple is quite low considering that Pfizer has the financial and marketing strength to buy up or be a partner with almost any other drug company in the world, Mr. Katz said, adding that "the stock is at a great price under every scenario."